Market report: UK shale in vogue

13 January 2014, 11:18

Onshore UK oil and gas play Egdon Resources (EDR:AIM) gains 41.3% to 13.25p and its peer IGas Energy (IGAS:AIM) is up 9.4% to 117.9p as reports of investment by French major Total's (FP:PA) in their shared Lincolnshire shale gas assets are confirmed. As prime minister David Cameron says the UK government is 'going all out for shale' and will effectively offer councils incentives to allow fracking, Total agrees to pay $1.6 million of back costs and will fund a fully carried $46.5 million work programme to gain a 40% interest in the acreage. Cantor Fitzgerald comments: 'This is clearly a significant milestone for both Egdon and UK shale gas development. The company has successfully built a key strategic position onshore UK and is one of very few publicly quoted companies with exposure to UK shale gas. In addition, Total's decision is a significant vote of confidence in the UK's shale gas prospects.'

Struggling department store Debenhams (DEB) sparks up the best part of 5% to 85.5p on curious newsSports Direct International (SPD), off 5p at 751p, has acquired a 4.63% stake in the business. We will look at the news in more detail here.

The long-awaited fine over historical selling practices is worse than expected for Homeserve (HSV). The home emergency policies provider has been hit with a £34.5 million penalty from the Financial Conduct Authority, assuming an early settlement discount of 30%. The company says it will now have to increase its provision by £30 million. The shares rise 3% to 290.84 regardless of the bad news as concluding the investigation removes financial and reputation uncertainty that's been hanging over the company since May 2012.

Jupiter Fund Management (JUP) ticks up 1% to 388p on rumours of a bid for its private client business. Names in the frame reportedly prepared to pay £50 million for the unit include Rathbone Brothers (RAT), Towry and Quilter.

Optimal Payments (OPAY:AIM) once again surpasses market expectation, saying its 2013 results will beat analyst forecasts. The payments group rises 0.5% to 408.73p. Shares highlighted the stock's turnaround potential in a Play of the Week article just over two years ago. The shares have since risen 622% in value.

Pubs operator-to-brewer Greene King (GNK) rises 1.2% to 907p on a solid trading update. Both Deutsche Bank and Numis imply there is scope for earnings upgrades if it can maintain a good performance over the next few months.

Real estate developer and regeneration specialist CLS (CLI) rises 1.1% to £13.82 despite chief executive officer (CEO) Richard Tice resigning. He becomes a non-executive director when he steps down next month after more than three years in the role. Tice’s departure comes as a shock. The Shares’ Play of the Week(May 2, 2013) has risen by 74% in value since last January. Executive vice chairman Henry Klotz will take over until a permanent replacement is found.

Recycling container group Straight (STT:AIM) gains 24% to 44p as it revealsit will generate revenues of up to £4 million a year after being appointed to provide services by two English local government-buying consortiums for at least two years. The £5.2 million cap also announces a similar deal in Scotland.

A strong endto the year for machine-to-machine technology company Telit Communications (TCM:AIM) drives the shares 2.75p higher to 179.75p. Shares took a 54% profiton its end October Play of the Weektrade just before Christmas.

June's $6.7 million SIMbox training deal helped Israeli training system supplier SimiGon (SIM:AIM) post impressive 16% revenue for 2013, slight ahead of expectations, while profits are expected to be up 20%. With $8 million of cash on the balance sheet, investors again chase the former SharesPlay of the Week higher, up 6% to 30.25p.

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